Swissair: counting the cost

The plan to save part of Swissair's operations will come under close scrutiny this week Keystone Archive

Traders and analysts may be able to take a closer look at the costs of the Swissair deal, in the days ahead.

Last week the long-awaited announcement finally came that both industry and government would come to the rescue of the ailing national carrier.

They will pump SFr4.24 billion ($2.57 billion) into setting up a new national airline, structured around the regional carrier, Crossair.

No doubt the debate over the amount of federal and local government’s financial involvement in the deal will continue after the European Commission voiced its concerns.

Analysts may also examine the extent to which the Swissair collapse has dented the image of the Swiss business community.

Stronger franc

Market players will also be keenly watching developments in the Swiss franc exchange rate. Last week saw a number of Swiss companies reporting that the stronger Swiss franc had affected business negatively.

Following the attacks on the United States on September 11 the franc moved higher against the dollar as traders sought a safe haven from market turbulence.

However, the US unit has been recovering lost ground as markets have settled down. Now the outlook for the franc will be more tied to developments in the neighbouring euro zone economies, where Switzerland’s trade is most closely linked.

A quiet week awaits on the corporate front with third quarter results mostly done with.

However, ABB will be back in the spotlight on Tuesday as it holds a press conference. Last week the Swiss-Swedish electro-technical concern, saw its net profits drop 76 per cent to $289 million (SFr479 million) in the first nine months of the year, compared to the same period in 2000.

by Tom O’Brien